§ 6. Mr. Robert Taylorasked the Chancellor of the Exchequer what estimate he has made of the total amount of extra taxation paid by Rolls-Royce Limited as a result of their decision to capitalise expenditure on research.
§ The Financial Secretary to the Treasury (Mr. Patrick Jenkin)I cannot disclose the taxation affairs of particular companies. But, as a general proposition, it does not follow that a company's tax liability would necessarily be increased if it capitalised its scientific research expenditure.
§ Mr. TaylorI welcome that reply. Does my hon. Friend agree that the practice of capitalising intangible and nonrealisable assets should be strongly deprecated by shareholders and employees alike?
§ Mr. JenkinIt is not for me to comment as between company and shareholders. As for the revenue treatment, it is clear, and has been since 1962, that capital expenditure qualifies for 100 per cent. scientific research allowance, that therefore there is no real advantage in capitalising, and that this need not necessarily lead to an increase in tax liability.